Why AMD's Stock Just Rocketed to Its Longest Winning Streak in Nearly a Year

Analysts are increasingly upbeat about AMD's momentum with central processing units for AI data centers

Advanced Micro Devices shares extended their rally into a seventh session as optimism builds for the company's business of selling central processing units for artificial-intelligence servers.

When the chip maker announces fourth-quarter earnings results next month, KeyBanc analyst John Vinh said he's expecting a revenue beat and higher guidance, mostly driven by strong demand for AMD's server CPUs, noting the latest-generation Turin data-center CPU.

AMD is close to being sold out of its server CPUs for the year, Vinh said in a note late Tuesday, and the company could raise average sales prices by 10% to 15% as hyperscalers clamor to lock in capacity. In a note earlier this month, Vinh said AMD's server CPU segment could grow at least 50% this year, driven by strong demand for its server chips, which are essential for AI data centers.

Bernstein analyst Stacy Rasgon lifted his revenue estimates for AMD's fourth quarter in a note on Wednesday, partly due to a more upbeat view of the company's server momentum. Rasgon is also modeling that sales of AMD's Epyc processors, which include the fifth-generation Turin CPU, will grow 30% this year.

Shares of AMD rose nearly 8% on Wednesday. The stock logged its seventh straight day of gains, its longest winning streak since Feb. 19, 2025, according to Dow Jones Market Data.

Even with that rally, Vinh says Wall Street still has a "mixed" view of AMD, due to uncertainties over how competitive its graphics processing units will be compared to Nvidia's.

"Bulls are encouraged by AMD's progress in competing with [Nvidia] in AI and strong server CPU," Vinh said. Bearish investors, on the other hand, are still skeptical over whether AMD will be able to meet volume and performance expectations with its GPUs.

When AMD reports earnings, Vinh said investors will be listening for commentary on the production timeline for its first rack-scale solution, Helios, and the accompanying Instinct MI455 series of GPUs, and for updates on customers for those offerings. The focus will also be on any updated expectations for AI revenue, and what the company says about the supply and demand dynamics for its traditional server chips, Vinh added.

AMD "at least" has an agreement with OpenAI for its Helios rack starting in the second half of this year, Rasgon said, but the AI startup is so far the only major customer.

Therefore, "the entire narrative" for AMD's AI efforts depends on how that partnership progresses, and if AMD can bring on more meaningful customers for Helios.

"Nevertheless, given the [OpenAI] ramp starts later this year, there may be less pressure on the near-term AI prospects at least," Rasgon said. Instead, AMD "seems likely to benefit in their core business from server strength and share gains," he said, and he thinks investors will be upbeat as they wait to see how its AI chips work out.